UK recovery well underway for manufacturers, says EEF

EEF's forecast for manufacturing growth in 2014 remains unchanged at 2.7%. However, it has increased its forecast for GDP growth to 2.6%. EEF said translating firms' intentions to invest and hire more staff into action would be the ultimate test for long term economic recovery. "The Chancellor must therefore gear his Budget this week to secure the best possible business conditions to support these investment and growth ambitions," it added. EEF chief economist Lee Hopley said: "This is the most positive set of indicators we have seen for some time, demonstrating that we've not just turned the corner, we're actively heading down the right road. "Manufacturers are clearly feeling more confident as their order books fill up and exports are strong. It is now vital that Government does all that it can to underpin support for companies, giving manufacturers the confidence to fulfil their investment and recruitment plans." According to the survey, output and order balances edged higher compared to the final quarter of last year to +22% and +20% respectively. Looking at sector performance the strongest positive balances were reported by companies in the electronics, motor vehicles and electrical equipment sectors. This positive trend is forecast to continue in the next quarter with output balances of +29% matching the previous record high in 2004 Q1, while total orders expectations saw a more marked increase to +37%, the highest in the survey's history. Investment intentions also strengthened for a fourth consecutive quarter to +34%, the highest level in the history of the survey.